The court emphasized the importance of compliance with labor laws and upheld the entitlement to recover unpaid bills and interest.

JAYANT NATH, J.

Caveat No.654/2017

Since respondent is represented through counsel, caveat stands discharged.

IA No.8111/2017 (exemption)

Exemption allowed subject to all just exceptions.

Application stands disposed of.

O.M.P. (COMM) 266/2017

1. This petition is filed under section 34 of the Arbitration and Conciliation Act, 1996 seeking to impugn the Award passed by the learned Arbitrator dated 1.4.2017. Some of the relevant facts as per the petition are that the petitioner awarded a contract for supply of trained manpower to the respondent to handle activities such as travel handling of passengers, embarkation and disembarkation of passengers, loading, unloading of baggage etc for the flights of the helicopters of the petitioner to Mata Vaishno Devi Shrine from Katra-Sanjhi Chhat-Katra vide agreement dated 24th September 2009 for the period 1.11.2008 to 31.10.2010.

2. The contract is said to have been extended from 1.11.2010 to 30.6.2011. A fresh contract was given to the respondent vide agreement dated 1.10.2011. We are concerned with this agreement in this petition. As per this contract the respondent was to charge a fee of Rs.5.90 lacs per month and was to supply 25 number of manpower which included one Manager, three supervisors and 21 Assistants/Helpers. The contract had a termination clause which permitted the petitioner to terminate the agreement by giving 10 days' notice. It is the case of the petitioner that being a public sector undertaking it had to see that the respondent/contractor was complying with the labour laws. It is submitted that the respondent had failed to show the said compliance. Hence, the contract was terminated on 29.10.2012 w.e.f. 8.11.2012.

3. Disputes having arisen between the parties the matter was referred for arbitration.

4. Before the Arbitrator the claimant/respondent made the following claims:- (i) Claim No.1 for refund of bank guarantee for Rs.7,08,000/- said to have been illegally invoked by the petitioner.

(ii) Claim No.2 for payment of dues of Rs.12,85,355/-

(iii) Claim No.3 for interest

(iv) Claim No.4 for Rs.29,50,000/- being the amount due for the period November 2012 to March 2013 i.e. after the termination of the contract.

(v) Claim No.5 interest on the above amount

(vi) Claim No.6 loss of profit on account of termination of contract. Rs.50,00,000/-

(vii) Claim No.7 was for goodwill and Reputation Rs.50,00,000/-;

(viii) Claim No.8 for litigation expenses.

5. On 13.10.2014 the learned Arbitrator framed 15 issues. The two basic issues were issue No.1 i.e. whether the agreement dated 1.10.2011 was illegally terminated by the respondent and second one being whether the claimant is entitled to recovery of a sum of Rs.14,38,075/- being the shortfall in the contractual payments made by the respondent between the months of May 2012 till November 2012.

6. On issue No.1 i.e. whether the agreement was illegally terminated by the petitioner, the learned Arbitrator noted the contents of the termination letter dated 29.10.2012. It noted the pleas of the petitioner that the respondent had not kept record of daily attendance of manpower, wages, ESI and PF etc. and did not supply the statements. It also noted that it was the case of the petitioner that the respondent failed to provide details of its license from the authorities under the Contract Labour Act. The learned Arbitrator concluded that the respondent had failed to show compliance of the Contract Labour Act and rejected the contention of the respondent that the said statute does not apply to the State of Jammu and Kashmir. The award, also noted that it was for the petitioner to have obtained a copy of the license under the said Contract Labour Act when the contract was signed on 1.10.2011. As such, the learned Arbitrator concluded that it was a default of both the parties as they have entered into a contract in 2011 without the respondent having obtained the necessary license. Accordingly, the Award concluded that the termination of the contract